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She has agreed in principle to serve in a consultancy role as a senior adviser to the CYBG chief executive David Duffy.

The completed offer will see Virgin Money shareholders own approximately 38% of the combined group which will have six million customers.

CYBG chairman Jim Pettigrew will continue in his role after the deal is completed, as will the bank's chief executive David Duffy and finance chief Ian Smith.

The combined group will be headquartered in Glasgow.

Duffy said the combination of the two banks would offer a “genuine alternative for consumers and small businesses”.

“By combining two of the UK's leading challenger banks, we will create a national, full-service bank with the capabilities needed to compete effectively with the large incumbent banks. We are bringing together CYBG's 175-year heritage in serving retail and SME customers and advanced digital technology, with the iconic Virgin Money brand and consumer champion credentials,” he said.

He added: “The strategic rationale is clear and offers both sets of shareholders real value, material earnings accretion, and enhanced capital generation for the benefit of all shareholders, together with both firms' customers, colleagues and local communities."

Virgin Money head Gadhia said the offer reflects “confidence in our strategy, our track record of delivery and the complementary strengths of the two businesses”.

She also highlighted a commitment from CYBG regarding Virgin Money employees.